It is prevalent in the manufacturing industry to use the terms formula and BOM interchangeably but this is not accurate. While internally the employees might be aware of the context of these two, but when choosing and implementing an ERP solution, it is important to understand that these two are distinct terms and should be used in the right context.
In today’s blog, we are going to tell you the difference between formula and BOM so that you know when to use it in your manufacturing process.
So, what is BOM?
BOM is a list of components such as raw materials, sub-assemblies that are required to produce the finished goods. The components are not consumed in the production process. BOM can be dismembered into individual components, and thus it is sparingly used in the discrete manufacturing process.
A BOM for paint might look like
- 1 box with 4 can
- 4-gallon cans
- Lid
- Label
- Wrap
BOM is an individual entity defined by
- ID
- Name
- Lines that describe the composition and ingredients
- Versions that define the product and period that the BOM can be used for
It is important to note that components have their own BOM which are references by their BOM versions.
When can you use BOM?
In simple manufacturing processes, BOM can be of great use.
What is the formula?
Moving on to the formula, it is a subtype of BOM which is primarily used in process manufacturing for the ability to accurately predict and model batch order process. Unlike BOM, which has components, the formula combines different measurements of certain ingredients. Items once combined to create a finished product in the formula cannot be dismembered into their original forms. Furthermore, the formula also supports additional functionalities like co-products, by-products, substitutes, catch weight items, and pack production coordination. It is defined for one specific finished product that is defined in the formula version.
The formula for a blue paint might look like
- White base
- Blue pigment
- Calcium carbonate
- water
What is common between both formula and BOM is they employ masters, versions, and lines in the product structure. While BOM is capable of satisfying all the requirements for a business, Formula provides the business with the ability to more with the rich set of tools at its disposal.